This copy is for your personal non-commercial use only. To order presentation-ready copies of Toronto Star content for distribution to colleagues, clients or customers, or inquire about permissions/licensing, please go to: www.TorontoStarReprints.com

Walkom: The decline of the self-destructive middle class

In a strange way, the Depression of the 1930s helped create the modern middle class.

The legacy of this slump may be its destruction.

That the middle class is under attack is not news. People know it in their own lives as pay cheques wither and jobs disappear.

Now a new Canadian study indicates the extent to which this country’s middle class has been eroded — even during the so-called good times.

Written by economist Armine Yalnizyan for the Canadian Centre for Policy Alternatives and due to be released Wednesday, “The Rise of Canada’s Richest 1%” uses previously unpublished research to analyze who reaped the gains during the boom years 1997 to 2007.

By an astounding margin, the winners were the ultra-rich. The top one per cent of the population — those earning an average of $405,000 — appropriated more than 30 per cent of the extra income generated in that decade.

Which left less for everyone else.

In past years, the plight of the very poor has received considerable attention, particularly in this newspaper. But increasingly, the other side of the income gap is being addressed.

YOU MIGHT BE INTERESTED IN...

The Trouble with Billionaires, a recent book by journalist Linda McQuaig and tax lawyer Neil Brooks, takes on the common assumption that the ultra-rich deserve what they make, as well as the belief that well-to-do philanthropists are always motivated by a desire to do good works.

Now Yalnizyan, whose previous work on Canada’s growing income gap highlighted problems faced by the poor has turned to the logical corollary: If some people are doing relatively badly, others must be raking the cash in.

Or, to paraphrase McQuaig and Brooks: The problem with billionaires is that they soak up all the money.

Yalnizyan points out in her study that incomes in Canada haven’t been so unequal since the beginning of World War II.

And, she notes, the gap between those at the very top and the rest of us — also known as the middle class — are growing faster than at any time in recorded Canadian history.

YOU MIGHT BE INTERESTED IN...

Canada’s middle classes have been under attack before. Middle class wage earners made gains in the early 1920s, only to see them wiped out by the Depression.

Yet it was hard times of the ‘30s — and the great boost that these times gave to radical social movements and Communist parties — that convinced governments they had to act.

Programs like unemployment insurance, welfare and old age pensions — as well as union-friendly labour laws — were designed in large part to prevent social upheaval.

And they worked. In the decades after World War II, the North American middle classes prospered. The gap between the rich and everyone else narrowed significantly.

Today, we see the same impoverishment of the middle classes that Canada endured 75 years ago. Employers use high unemployment levels to beat back unions. Governments use recessionary deficits as a rationale for cutting social spending.

But today, unlike the ‘30s, no popular radical movement threatens the social order. So there is little reason for governments to do anything serious.

Get more of the Star in your inbox

Never miss the latest news from the Star. Sign up for our newsletters to get today's top stories, your favourite columnists and lots more in your inbox

Instead, there is pressure — from the middle classes themselves — to adhere to the bourgeois virtues of thrift and individualism by cutting taxes, reducing social spending and limiting the power of unions.

As documented by Yalnizyan, such measures help the very rich. But they don’t help the disappearing middle class.

More News

Top Stories

More from The Star & Partners

Copyright owned or licensed by Toronto Star Newspapers Limited. All rights reserved. Republication or distribution of this content is expressly prohibited without the prior written consent of Toronto Star Newspapers Limited and/or its licensors. To order copies of Toronto Star articles, please go to: www.TorontoStarReprints.com